Cross-Border E-Commerce

with Beta Fellow – betafellow.com

Guest: Thomas Chuang

About the Guest

VP of Finance and Strategy @ Belong

Ex-VP of Finance @ Wish, from Series B to IPO

Ex-VP of Operations @ Wish, rebuilt global logistics

Experienced investment analyst @ GGV Capital

Before Wish

Thomas was born in Taiwan, went to Singapore for school. After that he also went to school in the USA, then work and stayed there for ~20 years now.

Before going to wish, Thomas was an investment analyst at GGV. There are a lot of opportunities to learn and understand what questions investors tend to ask. After 5-6 years, Thomas wanted to really learn how a successful company is built and get his hands dirty.

Wish

Why Wish – Wish was founded by Peter and Danny back in 2011 to basically bring affordable shopping to the world, particularly the underserved markets in the US, and the rest of the world. When I was considering my next “personal growth” phase, and after talking to both Peter and Danny (at that time they must have interviewed over 25 people), I was struck by how laser-focus the two of them were. Wish was serving a big TAM, engineering-driven, and trail-blazing the cross-border ecommerce space, it was a no-brainer for me to join.

Evolving roles at Wish – I was initially hired to build up Wish’s finance function back in 2014 when we just closed our Series B. We had maybe 20+ full time engineers, and a few more on the non-engineering side. I was one of the lucky few on the non-engineering side. As someone that had a bit more professional experience compared to folks that just came out from school that joined Wish as their first job, I had the opportunity to be a “jack of all trades” , taking care of International expansion, HR, Legal, Fraud, partnership negotiation etc, anything you can think of. At the same time, I had to also support the co-founders in fundraising, closing the books and forecasting for the business. It was fun but also entirely taxing on my health haha. My role evolved into a more structured strategic finance role as the company grew and as I hired my own boss the CFO. Eventually I ended running our global logistics operations as well as partly running with the team our Wish’s IPO process in my most recent 2 years at Wish.

Major Obstacles – From an external perspective looking at the marketplace platform, rampant counterfeiting on the platform was one of main problems we had early on. I remember going to this International Anticounterfeiting Coalition conference with our head platform engineer Josh to face the “wrath” of the brands like LV, Apple, Nike etc to explain to them what we have been doing as a marketplace platform to solve their concerns. We had even created a program for the Brands to enroll into and helped us police the platform. We proactively solved this problem by building relationships with the Brands and provided a way for them to voice their concerns and an avenue for us to act on once counterfeit issues were identified. It was a great success.

Internally, sustainable growth is always on top of our minds. How do we ensure our user retention is healthy as we continued to turn on our marketing engine. Later on in the years, with many different headwinds (marketing, logistics, etc), we had to really stay a step ahead of them to resolve issues much sooner.

Difference between Chinese and US ecommerce – Wish is about bringing Chinese merchants to rest of the world. The impression is Chinese ecommerce is light years ahead of the US ecommerce, except Amazon. We tried to learn from Alibaba back then.

Fund raising – To me fundraising is a set of motions. At different stages investors would focus on different things. For instance, in the earlier rounds (seed to B), product-market-fit was key. Post Series B, growth, retention and payback became the highlights. As founders of your company, you have to know your product well, you need to know your moats and your weaknesses, be honest with yourself and even talk about plans on how you will mitigate your risks. VCs are experts in distilling information to its core and they have all the relevant data to dissect your company. Lastly, know your numbers down cold. Fundraising is also about building credibility, your numbers need to be internally consistent, especially on your KPIs, so invest in getting your data right so you can make data-driven decisions.

Lessons on cross boarder ecommerce – First thing is to figure out which side of the market is the harder side to address. For marketplace business, the harder one is always the supply side, so you may want to really spend enough time solidifying your value props to the suppliers. Was it the ease of using your platform? or purely access to consumers that they otherwise would not have access to? Was it profitable selling on your platform? All these are basic table-stakes that need to be addressed. One of the biggest lessons I have learned is that merchants, and especially Chinese merchants, can put up with a number of frictions, so long as the platform is generating enough cash flow for their business. To do otherwise will slowly kill the platform. Therefore, have a full grasp of the entire value chain is critically important, IMHO, your business relies largely on how well you can translate your understanding of the supply chain and leverage your technology to solve any of the frictions in between.

Another lesson learned was how I had to be strategic but also focus on the execution excellence at the same time. A prime example is how I rebuilt Wish’s cross-border logistics function during (1) the pandemic times, (2) USPS’ withdrawal from the UPU, which increase logistics costs by 4-5x and (3) EU sales taxes implementation that aimed at leveling the playing field for the local brick and mortar merchants. To solve these 3-hit punches I had to really think from a first principle perspective, break each problem down to its core, identify the elements that are impacting the business, and then re-connect them with a better set of business solutions. Ultimately if i had solved enough problems, i would have solved the majority of the problems.

Cost of shipping issue – cost of shipping is becoming higher and higher every month and it’s a big problem for Wish. Thomas came in and used the first principle thinking. Identifying who are the players involved, and then understand their perspective to work with them or do something different on our side. It turned out we need to get to the basics of shipping, break it down and solve bit by bit.

Lightning Round

Favorite Book: The Cold Start Problem by Andrew Chen.

Favorite startup/idea: Every startup is incredibly hard and I admire all of them. My next interest is on how blockchain technology can help remove middlemen, carve those values and share with the suppliers or the consumers.

If you start your career again, what would be one thing you do differently: buy bitcoin! Just kidding. To be serious, I would talk with 10X people and share my ideas with them. Do not be afraid of trying new things as well.

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